HMRC delays self-assessment penalty notices

In the latest of a series of disruptions seen by self-assessment taxpayers this year, HMRC has announced it will be delaying its late-filing notices in 2019 for up to two months.

These letters are usually sent out in February, to taxpayers who missed the midnight deadline for self-assessment tax returns on 31 January.

They include a notification of the £100 penalty due for late filing, and a warning about further fines that could be incurred.

This year, the tax authority has made the decision to delay the notices until the end of April at latest, because it is expecting Brexit to cause increased demand in its call centres.

The UK remains on course to leave the EU at 11pm on 29 March 2019.

In a statement on the timings of notices, HMRC confirmed that "individuals who filed late will still be charged the penalty; but the notice will be delivered later than normal".

If you missed the self-assessment deadline for your 2017/18 return but have not received a notice, be aware that you'll still need to pay the fine.

More importantly, you could risk higher penalties the later you leave it.

Extra fines

Unless you have a reasonable excuse, you'll receive an initial £100 penalty if you missed the self-assessment deadline.

After three months, this will increase with additional penalties of £10 a day, even if you have no tax to pay.

HMRC has said despite the delayed notices, these additional fines will still be issued "in appropriate cases, at the normal time".

The Association of Taxation Technicians (ATT ) has asked for clarity on whether this will take into account the late issuing of notices, arguing that some taxpayers could end up paying the daily penalties before they're made aware of them.

Jon Stride, co-chair of the ATT's technical steering group, said:

"The delay in issuing penalty notices may give taxpayers who haven't filed their 2017/18 tax returns a misplaced confidence that they will either avoid any penalty or, at worst, incur only the fixed £100 penalty.

"In fact, if the £100 penalty notice is issued by HMRC at the end of April 2019, a taxpayer may - by the time the notice hits their doormat - already be incurring additional penalties.

"Anyone who has yet to file their 2017/18 tax return should do so as a matter of urgency."

If the return is left six months late, another charge will apply of either £300 or 5% of the tax due - whichever is higher. The same fine is applied again if the return is more than 12 months late.